Key Takeaways

• Private loan rates vary more than ever: Strong credit can mean the difference between competitive rates and high-cost borrowing—sometimes thousands of dollars over the life of your loan.
• New program-specific loans offer flexibility: Medical, dental, law, and MBA students now have access to loans with higher limits, deferred repayment options, and extended grace periods.
• Federal loans may not always be the lowest-cost option: With Grad PLUS rates climbing, private loans with strong credit or a cosigner can sometimes offer better terms.
• Your credit score matters significantly: Lenders reward scores of 740+ with their best rates, while those with lower scores may pay more.
• Competition works in your favor: More lenders targeting grad students means better rates, fewer fees, and more flexible repayment options if you shop around.

With Grad PLUS loans ending for new borrowers in July 2026, the private loan market for grad students has shifted fast. Lenders are competing harder for your business, rates vary widely based on your credit, and you’ve got more options than ever if you know where to look.

If you’re heading into a graduate program or already enrolled, understanding these shifts can save you thousands. Let’s break down what’s actually happening with private loans right now and what it means for your wallet.

Why 2025-2026 Is Different

The landscape for funding graduate school is changing. As federal programs evolve and Grad PLUS phases out for new borrowers starting in 2026, private lenders have stepped up with new products and competitive rates designed specifically for grad students.

This shift means you have more choices, but also more responsibility to compare options carefully. The good news? If you have decent credit or can apply with a cosigner, private loans are now a strong alternative worth exploring—and in some cases, a better option than federal loans.

Your Loan Options: Federal vs. Private

Most grad students start with federal loans because they offer fixed rates, income-driven repayment plans, and potential forgiveness programs. These protections matter if your career path shifts after graduation.

Your federal options include Direct Unsubsidized Loans (up to $20,500 per year) and Grad PLUS loans (which cover remaining costs). Grad PLUS loans require a credit check, and their rates have climbed in recent years.

Here’s where it gets interesting: private lenders can sometimes offer better rates than federal options, especially if you have strong credit or a creditworthy cosigner. Ascent offers both cosigned and non-cosigned graduate loans, giving students flexible options depending on their credit history and field of study. Many people use a combination of both to cover tuition, fees, and living costs. The key is comparing your actual rates to see what makes financial sense for your situation.

Here’s how Ascent’s private loans compare to Federal Grad PLUS loans:

Feature	Ascent Private Student Loans	Federal Grad PLUS Loans
Maximum Aggregate Loan Limit	$400,000¹	None²
Repayment Grace Period Post-Graduation	9 months	No standard 6-month grace for all borrowers; first payment may be required shortly after disbursement or when leaving school
Loan Terms Offered	6	1
Loan Origination Fee	0%	4.228%
DACA³ and TPS⁴ Student Eligible	✓	✗
International Student Eligible	✓	✗
Dischargeable in Bankruptcy⁵	✓	Only under undue hardship
Automatic Payment Benefit⁶	✓	✓
Cashback Graduation Benefit⁷	✓	✗
Financial Wellness Training Before Loan Disbursement	✓	✗

Rates Are Up (Here’s What That Means for You)

Interest rates across the board are higher than they were a few years ago. Federal loan rates for 2025-2026 are set annually by Congress, while private loan rates fluctuate based on market conditions and your creditworthiness.

In 2025, private graduate loan rates ranged from approximately 3.3% to 18% APR, depending on whether you choose fixed or variable rates, your credit score, and whether you have a cosigner.

Here’s what this means:

• Federal Grad PLUS loans might not be the lowest cost option anymore (check current rates before assuming)
• Private lenders reward strong credit with significantly lower rates
• If you have excellent credit, you could secure a competitive rate with a private loan

Don’t assume federal is always the best rate. Run the numbers. If you have strong credit or a cosigner, private loans often offer lower rates than federal rates, especially for Grad PLUS. Check what rates you might qualify for to see how your credit could impact your borrowing costs.

Your Credit Score Is Everything

Private lenders are pickier than ever about who gets their best rates. Your credit score directly impacts what rate you’ll receive, and the difference between a 680 score and a 740 score can mean thousands of dollars over your loan’s lifetime.

What lenders evaluate:

• Credit scores (typically 670+ to qualify, 740+ for the best rates)
• Debt-to-income ratio
• Employment history or proof of income
• Cosigner creditworthiness (if applicable)

If your credit isn’t there yet, consider applying with a cosigner (usually a parent or family member with established credit) to access better rates. Some lenders, like Ascent, also offer non-cosigned loans for those enrolled in certain programs, which helps if you don’t have someone to cosign. Ascent evaluates factors beyond credit, such as future income potential, to help students qualify.

Even improving your credit score by 50 points before applying can drop your rate significantly. If you have time before borrowing, work on building your credit.

More Lenders Targeting Grad Students

Private lenders have noticed that grad students are lower-risk borrowers than undergrads. You’re older, more likely to have credit history, and statistically more likely to finish your degree and land a higher-paying job.

This competition works in your favor:

• More loan options to choose from
• More competitive rates
• Better loan terms and repayment flexibility
• Specialized loans for high-cost programs (medical, dental, law)

When comparing lenders, look beyond rates. Check for application fees, origination fees, prepayment penalties, and repayment options. Some charge fees that add hundreds or thousands to your balance before you’ve borrowed anything.

Also look for perks like rate discounts for autopay, cosigner release options, and flexible repayment terms. These features make a real difference after graduation. Ascent offers a 0.50% autopay discount and no application or origination fees, which builds trust and reinforces transparency.

At Ascent, we believe students deserve transparent information about their options, so they can borrow responsibly and confidently.

Program-Specific Loans Are Everywhere Now

If you’re in a professional degree program (medicine, dentistry, law, MBA), you’ll find loans built specifically for your field. Ascent offers graduate loans for MBA, medical, dental, law, and other professional programs, up to the school-certified cost of attendance. These often come with higher borrowing limits because lenders know these degrees lead to higher earning potential.

What to look for:

• Higher annual and aggregate loan limits (some lenders offer up to $400,000 for certain graduate programs like medical or dental school)
• Deferred repayment options during school and residency (especially for medical and dental students)
• Extended grace periods beyond the standard six months
• Interest-only payment options during school

These features give you breathing room while you’re focused on your studies, but remember that interest still accrues. Paying even small amounts toward interest while in school reduces what you’ll owe later.

If you’re in medical, dental, or law school and borrowing substantial amounts, understanding your loan terms and repayment options before you sign is critical.

Fixed vs. Variable: Which Rate Makes Sense?

Most private student lenders, including Ascent, offer both fixed and variable rates, allowing borrowers to choose the stability of a fixed rate or the potential savings of a variable rate. 

Here’s how to think about them:

Fixed rates stay the same for your loan’s lifetime. You’ll know exactly what your payment will be every month, making budgeting easier. Fixed rates typically start higher than variable rates, but you’re paying for predictability.

Variable rates fluctuate with market conditions. They often start lower, which is tempting when you’re trying to minimize costs. But if rates rise (and they can), your monthly payment goes up too. Variable rates get risky when you’re borrowing large amounts or planning a long repayment term.

For most people borrowing substantial amounts for grad school, fixed rates make more sense. The peace of mind that your rate won’t spike is worth the slightly higher starting rate.

Refinancing After Graduation

Here’s something more people are figuring out: you’re not stuck with your original loan terms forever. Once you graduate and land a steady income job, refinancing can lower your rate and save you money.

While Ascent currently focuses on in-school lending, refinancing through other lenders can be an option later if your credit improves.

What you need to know about refinancing:

• You’ll need good credit and a stable income to qualify for the best rates
• Refinancing federal loans into a private loan means losing federal protections (income-driven repayment, forbearance, potential forgiveness)
• You can refinance multiple times if rates drop or your credit improves
• Some lenders offer rate discounts for autopay or other incentives

Don’t refinance federal loans unless you’re certain you won’t need federal benefits. But if you’ve already taken private loans, refinancing after graduation is worth exploring. Many people successfully refinance to secure lower rates once they’ve established careers and improved their credit.

What to Do Right Now

If you’re preparing to borrow for grad school, here’s your action plan:

1. Compare federal options first (Direct Unsubsidized and Grad PLUS if needed)
2. Check your credit score and work on improving it if you have time
3. Compare at least 3-5 private lenders to see who offers the best rates for your situation
4. Read the fine print on fees, repayment options, and rate discounts
5. Consider a cosigner if it significantly lowers your rate (but plan to release them later if possible)
6. Borrow only what you actually need to cover tuition, fees, and essential costs

The private loan market is more competitive than it’s been in years, which works in your favor if you do your homework. Take the time to understand your options, compare lenders, and choose loans that align with your financial situation and career plans.

Graduate school is an investment in your future, and the loans you choose today shape your financial flexibility tomorrow. Whether you’re comparing federal and private options or ready to explore what’s out there, understanding your choices makes all the difference.

Ready to take the next step? Check out Ascent’s graduate loan options and explore AscentUP financial wellness resources to help you make confident decisions about borrowing and managing your money throughout grad school.

Table Notes:

1. Ascent will lend up to cost of attendance. 
2. Aggregate loan limit for current Grad PLUS originations
3. DACA stands for Deferred Action for Childhood Arrivals
4. TPS stands for Temporary Protected Status
5. Beginning June 5, 2023, Ascent College Loans will contain provisions for a clear path to discharge after five years. See FAQs on ascentfunding.com for more details.  
6. Ascent borrowers are eligible to receive a 0.50% interest rate reduction for signing up for automatic payments
7. Ascent borrowers are eligible to receive a 1% cash back benefit on loan balance for successfully graduating.